Why Emergent BioSolutions stock is soaring today

Actions of Emerging BioSolutions (EBS 18.71%) soared 19.5% as of 11:09 a.m. ET Friday after rising as much as 34.1% earlier in the day. The big win came after the European Center for Disease Prevention and Control raised its risk level for mpox to “moderate” from “low”. The decision followed the confirmation of a case of mpox infection in Sweden.

On Wednesday, the World Health Organization declared a global public health emergency after an outbreak of mpox in Africa. The first cases were reported in the Democratic Republic of Congo, but the virus quickly spread to other African countries.

How does the mpox outbreak affect Emergent BioSolutions?

The only vaccine approved to prevent mpox is produced by nordic bavarian. However, the US Centers for Disease Control and Prevention (CDC) has also recommended Emergent BioSolutions’ ACAM2000 vaccine for mpox prevention.

ACAM2000 is currently approved only for the prevention of smallpox. It is also recommended by the Advisory Committee on Immunization Practices for some people at risk of exposure to orthopoxvirus infections. Mpox is an orthopoxvirus similar to smallpox.

Is Emergent BioSolutions stock a buy?

I don’t think Emergent BioSolutions stock is a buy because of the mpox outbreak. The company may experience a temporary increase in sales for ACAM2000, but there is no reason at this time to expect a significant sustained impact.

Meanwhile, Emergent BioSolutions is still trying to turn its business around, with revenue down 25% year-over-year in the second quarter of 2024. In my view, other healthcare stocks offer better risk-reward propositions.